Revolut already has 1.3m customers in Switzerland. Now it wants a Swiss banking licence. Why?
A new force may soon emerge in Swiss banking—though it is hardly a newcomer. Revolut, a British fintech firm, already has 1.3m customers in Switzerland.
The firm has applied to the Swiss Financial Market Supervisory Authority (Finma) for a banking licence. For now, many Swiss customers use Revolut as a secondary account, particularly when travelling or spending abroad, where its fees are often well below those of traditional banks.
A Swiss licence could help Revolut turn those occasional users into primary customers. It would bolster trust and bring eligible deposits of up to CHF 100,000 per customer within Switzerland’s deposit-protection regime.
More important, it would allow Revolut to offer products tailored to the Swiss market. Until now the firm has served Swiss customers under a Lithuanian banking licence. A domestic licence could eventually allow it to offer pillar 3a retirement accounts or integrate with Twint, Switzerland’s ubiquitous mobile-payment system. In principle it could also lend to customers, though Revolut says this is not currently a priority.
That would sharpen competition. As a fully fledged Swiss bank, Revolut would pose a broader threat than it does today. The first to feel the pressure may be other neobanks. Swiss digital providers such as Neon, Yuh and Zak are backed by established banks and already operate within the domestic regulatory system. A Swiss licence would remove one of their advantages over Revolut.
The threat to traditional banks is less clear. Incumbents still offer products that digital challengers have only partly replicated, including mortgages, corporate banking, face-to-face advice and wealth management for rich clients. Whether fintechs can push successfully into these businesses remains to be seen.
Nor has Revolut’s rapid growth been free of regulatory trouble. In 2016 Britain’s Financial Conduct Authority opened an investigation after a whistleblower alleged that the company’s anti-money-laundering checks were inadequate and that suspicious transactions were not always being flagged properly. The investigation was later closed. Revolut applied for a British banking licence in 2021 and received one, with restrictions, in 2024 after a lengthy wait. More recently Lithuania’s central bank fined the firm €3.5m over shortcomings in its transaction-monitoring and anti-money-laundering controls.
The company has faced other problems, too. Personal information belonging to at least 700 customers was disclosed to unauthorised recipients in a data breach; Revolut said the recipients had impersonated a government agency using genuine email addresses. In April Italian authorities also fined the firm several million euros over allegedly misleading commercial practices. Revolut has appealed against that decision.
Yet the bigger strategic problem for Revolut is not regulation but economics.
The services on which fintechs first built their appeal—cheap foreign exchange, low-cost card payments and inexpensive cash withdrawals abroad—have become fiercely competitive. Wise, Monzo, N26, Yuh and Neon, among others, all compete heavily on price on these services. What was once a distinctive proposition is increasingly a commodity.
Customers have also become adept at gaming the differences. Some keep several cards and use whichever is cheapest for a particular transaction. Revolut, for example, charges users of its free plan a 1% premium for some weekend currency exchanges. Other providers may be cheaper in those circumstances. Travellers can likewise spread foreign currency cash withdrawals across several cards to remain within each provider’s fee-free allowance.
That makes it harder for fintechs to earn much from the services that first attracted customers. The more promising prize lies elsewhere: in becoming the customer’s main bank.
Salary payments and current-account balances are especially valuable. Customers often leave large sums sitting in accounts that pay little or no interest. Banks can invest that money in low-risk assets, earning interest at relatively little capital cost. They can also use a primary banking relationship to sell customers savings products, investments, pensions, credit and, eventually, mortgages.
This helps explain why Revolut wants a Swiss banking licence. Cheap foreign exchange and card fees may have brought customers through the door. The next challenge is persuading them to do more.
The question is whether Revolut and its peers can convince customers to move their salaries and savings from their main bank—or whether they will remain merely useful second accounts, pulled out mainly for cheaper spending abroad.
More on this:
Revolut press release (in English)
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